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Social Security Earnings Test and the Labour Supply of the Elderly: New Evidence from Unique Survey Responses in Japan

Japanese Economic Review

Published online on

Abstract

This study proposes an alternative approach of utilizing direct responses to a survey on the social security earnings test for the elderly to provide new evidence on the sensitivity of the labour supply decision of workers aged between 60 and 64 with respect to the test. Our empirical results show a discouraging effect on working in a large proportion of these workers in Japan, even after correcting for the observed attributes of individuals who reported being either affected or unaffected.